DEBTORS JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

Transcription

1 TOGUT, SEGAL & SEGAL LLP One Penn Plaza Suite 3335 New York, New York (212) Albert Togut Frank A. Oswald Brian F. Moore Lara R. Sheikh Proposed Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re: : Chapter 11 : LOEHMANN S HOLDINGS, INC., et al., 1 : Case No. : Debtors. : (Jointly Administered) : x DEBTORS JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE 1 The Debtors in these chapter 11 cases, along with the last four digits of each U.S. Debtors Federal tax identification number, are: Loehmann s Holdings, Inc., (9380), Loehmann s, Inc. (1356), Loehmann s Real Estate Holdings, Inc. (6682), Loehmann s Operating Co. (6681) and Loehmann s Capital Corp. (2694).

2 TABLE OF CONTENTS ARTICLE I. DEFINED TERMS AND RULES OF INTERPRETATION... 1 A. Rules of Interpretation... 1 B. Defined Terms... 1 ARTICLE II. ADMINISTRATIVE, DIP FACILITY AND PRIORITY CLAIMS A. Administrative Claims B. DIP Facility Claims C. Priority Tax Claims ARTICLE III. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS 19 A. Classification of Claims B. Treatment of Claims and Interests C. Special Provision Governing Unimpaired Claims D. Acceptance or Rejection of the Plan E. Nonconsensual Confirmation ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN A. Limited Substantive Consolidation B. The Rights Offering C. Corporate Existence D. Vesting of Assets in the Reorganized Debtors E. Indemnification Provisions in Organizational Documents F. Cancellation of Agreements, Notes and Equity Interests G. Reorganized Company Equity Interests H. Exit Financing I. Restructuring Transactions J. Corporate Action K. Post-Effective Date Governance L. Effectuating Documents and Further Transactions M. Authority to Act N. Exemption from Certain Transfer Taxes and Recording Fees O. Board Representation P. Senior Management Q. New Shareholders Agreement R. Management Incentive Plan S. Preservation of Rights of Action ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES A. Assumption and Rejection of Executory Contracts and Unexpired Leases B. Cure of Defaults for Assumed Executory Contracts and Unexpired Leases C. Claims Based on Rejection of Executory Contracts and Unexpired Leases D. Assumption of Directors and Officers Insurance Policies E. Reservation of Rights F. Nonoccurrence of Effective Date G. Compensation and Benefit Programs H. Workers Compensation Programs i

3 ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS A. Distributions on Account of Claims and Interests Allowed As of the Effective Date B. Distributions on Account of Claims and Interests Allowed After the Effective Date C. Delivery of Distributions D. No Postpetition Interest E. Claims Paid or Payable by Third Parties F. Allocation Between Principal and Accrued Interest G. Minimum Distribution H. General Unsecured Claims Distribution Account ARTICLE VII. PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS OR EQUITY INTERESTS A. Allowance of Claims and Interests B. Claims and Interests Administration Responsibilities C. Estimation of Claims and Interests D. Disallowance of Claims or Interests E. Preservation of Debtors Rights and Defenses Pending Allowance of Claims ARTICLE VIII. CONDITIONS PRECEDENT TO CONFIRMATION AND THE EFFECTIVE DATE A. Conditions Precedent to Confirmation B. Conditions Precedent to the Effective Date C. Waiver of Conditions D. Non-Occurrence of Conditions ARTICLE IX. RELEASE, INJUNCTIVE AND RELATED PROVISIONS A. Binding Effect; Plan Binds All Holders of Claims and Equity Interests B. Discharge of Claims and Termination of Interests C. Subordinated Claims D. Compromise and Settlement of Claims, Interests, and Controversies E. Debtor Release F. Releases by Holders of Claims G. Exculpation H. Indemnification I. Injunction J. Setoffs K. Release of Liens ARTICLE X. ALLOWANCE AND PAYMENT OF CERTAIN ADMINISTRATIVE CLAIMS A. Professional Claims B. Other Administrative Claims ARTICLE XI. RETENTION OF JURISDICTION ARTICLE XII. MISCELLANEOUS PROVISIONS A. Immediate Binding Effect B. Payment of Statutory Fees C. Modification of Plan D. Revocation of Plan ii

4 E. Reservation of Rights F. Successors and Assigns G. Service of Documents H. Term of Injunctions or Stays I. Entire Agreement J. Governing Law K. Exhibits L. Nonseverability of Plan Provisions upon Confirmation M. Closing of Chapter 11 Cases N. Conflicts O. Dissolution of Committee P. Section 1125(e) Good Faith Compliance Q. No Stay of Confirmation Order iii

5 Loehmann s Holdings, Inc. and the other Debtors in the above-captioned chapter 11 cases propose the following joint plan of reorganization for the resolution of outstanding creditor claims against, and equity interests in, the Debtors pursuant to title 11 of the United States Code, 11 U.S.C Capitalized terms used in the Plan and not otherwise defined have the meanings ascribed to such terms in Article I.B of the Plan. Reference is made to the Disclosure Statement, Filed contemporaneously with the Plan, for a discussion of the Debtors history, businesses, assets, results of operations, and projections of future operations, as well as a summary and description of the Plan and certain related matters. The Debtors are the proponents of the Plan within the meaning of section 1129 of the Bankruptcy Code.

6 ARTICLE I. DEFINED TERMS AND RULES OF INTERPRETATION A. Rules of Interpretation 1. For purposes of the Plan, unless otherwise provided herein: (a) whenever from the context it is appropriate, each term, whether stated in the singular or the plural, will include both the singular and the plural; (b) any reference in the Plan to an existing document or schedule Filed or to be Filed means such document or schedule, as it may have been or may be amended, modified or supplemented pursuant to the Plan; (c) any reference to an Entity as a Holder of a Claim or Equity Interest includes that Entity s successors and assigns; (d) all references in the Plan to Sections and Articles are references to Sections and Articles of or to the Plan; (e) the words herein, hereunder, hereof and hereto refer to the Plan in its entirety rather than to a particular portion of the Plan; (f) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Plan; (g) subject to the provisions of any contract, certificates of incorporation, by-laws, instrument, release or other agreement or document entered into in connection with the Plan, the rights and obligations arising under the Plan shall be governed by, and construed and enforced in accordance with, federal law, including the Bankruptcy Code and the Bankruptcy Rules; (h) the rules of construction set forth in section 102 of the Bankruptcy Code will apply to the Plan; and (i) in computing any period of time prescribed or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) will apply. B. Defined Terms Unless the context otherwise requires, the following terms shall have the following meanings when used in capitalized form herein: 1. Accept or Accepted means, with respect to the acceptance of the Plan by a Class of Claims, votes to accept the Plan (or deemed acceptance of the Plan pursuant to an order of the Bankruptcy Court or the applicable provisions of the Bankruptcy Code) by the requisite number and principal amount of Allowed Claims in such Class as set forth in section 1126(c) of the Bankruptcy Code. NEWYORK:

7 2. Accrued Professional Compensation means, at any date, all accrued fees and reimbursable expenses (including success fees) for services rendered by all Retained Professionals in the Chapter 11 Cases through and including such date, to the extent that such fees and expenses have not been previously paid and regardless of whether a fee application has been Filed for such fees and expenses. To the extent that there is a Final Order denying some or all of a Retained Professional s fees or expenses, such denied amounts shall no longer be considered Accrued Professional Compensation. 3. Administrative Claim means any Claim for costs and expenses of administration of the Chapter 11 Case that is Allowed under section 503(b), 507(b), or 1114(e)(2) of the Bankruptcy Code, including, without limitation: (a) any actual and necessary costs and expenses incurred on or after the Petition Date of preserving the Debtors Estates and operating the businesses of the Debtors prior to the Effective Date; (b) compensation for legal, financial, advisory, accounting, and other services and reimbursement of expenses Allowed by the Bankruptcy Court under section 327, 330, 331, 363, or 503(b) of the Bankruptcy Code to the extent incurred prior to the Effective Date; (c) the Commitment Fee and the Backstop Party Indemnification Obligations and (d) all fees and expenses of the professionals and advisors required to be paid by the Debtors under the Restructuring Support Agreement and the Commitment Letter, including without limitation, the fees and expenses of the Backstop Party Professionals. 4. Administrative Claims Bar Date means the deadline for filing an Administrative Claim (other than an Administrative Claim for the fees and expenses of the professionals and advisors required to be paid by the Debtors under the Commitment Letter, including without limitation, the Commitment Fee, if any), which Claims must be filed so as to be actually received on or before 5:00 p.m. prevailing Eastern Time on the date that is 30 calendar days after notice of the Effective Date, unless otherwise ordered by the Bankruptcy Court. 5. Affiliate has the meaning set forth in section 101(2) of the Bankruptcy Code and shall include, without limitation (i) any fund or managed account client in respect of which such Person acts as investment manager and (ii) any fund or managed account client with the same investment manager (or an investment manager that is an Affiliate of such investment manager) of such Person. 6. Allowed means with respect to Claims: (a) any Claim, proof of which is timely Filed by the applicable Claims Bar Date (or that by the Bankruptcy Code or Final Order is not or shall not be required to be Filed); (b) any Claim that is listed in the Schedules as of the Effective Date as not disputed, not contingent, and not unliquidated, and for which no Proof of Claim has been timely Filed; or (c) any Claim allowed pursuant to the Plan or a Final Order of the Bankruptcy Court; provided, however, that with respect to any Claim described in clauses (a) or (b) above, such Claim shall be considered Allowed only if and to the extent that with respect to any such Claim no objection to the allowance thereof has been interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court or such an objection is so interposed and the Claim shall have been Allowed by a Final Order; provided, further, however, that the Claims described in clauses (a), (b) and (c) above shall not include any Claim on account of a right, 2

8 option, warrant, right to convert other right to purchase an Equity Interest. Except as otherwise specified in the Plan or an order of the Bankruptcy Court or with respect to Priority Tax Claims, the amount of an Allowed Claim shall not include interest on such Claim from and after the Petition Date. Any Claim that has been or is hereafter listed in the Schedules as disputed, contingent, or unliquidated, and for which no Proof of Claim has been timely Filed, is not considered Allowed and shall be expunged without further action and without any further notice to or action, order, or approval of the Bankruptcy Court. For the avoidance of doubt, the Secured Note Claims shall be deemed Allowed in the amounts of the Class A Notes Claims and the Class B Notes Claims, respectively, and the Prepetition Credit Agreement Secured Claims shall be deemed Allowed in the amount of the Prepetition Credit Agreement Secured Claims. 7. Amended and Restated Bylaws means the bylaws of Reorganized Loehmann s Holdings, Inc. substantially in the form of those attached to the Plan Supplement. 8. Amended and Restated Certificate of Incorporation means the certificate of incorporation of Reorganized Loehmann s Holdings, Inc. substantially in the form of that attached to the Plan Supplement. 9. Approval Order the Order entered by the Bankruptcy Court approving and authorizing (i) the assumption by the Debtors pursuant to section 365 of the Bankruptcy Code of the Commitment Letter (ii) the Debtors entry into the Restructuring Support Agreement and (iii) the transactions contemplated in the Commitment Letter, including the payment of the Commitment Fee and certain expense reimbursements and performance of the Backstop Party Indemnification Obligations. 10. Assumed Executory Contract and Unexpired Lease Schedule means the list of Executory Contracts and Unexpired Leases to be assumed by the Debtors pursuant to the provisions of Article V hereof. 11. Avoidance Actions means any and all actual or potential claims or causes of action to avoid a transfer of property or an obligation incurred by the Debtors pursuant to sections 542 to 553 of the Bankruptcy Code. 12. Backstop Commitment has the meaning ascribed to such term in the Commitment Letter. 13. Backstop Parties means Istithmar and Whippoorwill. 14. Backstop Party Indemnification Obligations means the indemnification obligations set forth in Section 8 of the Commitment Letter. 15. Backstop Party Professionals means Gibson Dunn & Crutcher, LLP in its capacity as counsel to Whippoorwill, Cleary Gottlieb Steen & Hamilton, LLP in its capacity as counsel to Istithmar and Conway del Genio Gries & Co., LLC in its capacity as financial advisor to Whippoorwill. 3

9 16. Ballot means the ballots accompanying the Disclosure Statement upon which certain Holders of Impaired Claims entitled to vote shall, among other things, indicate their acceptance or rejection of the Plan in accordance with the Plan and the procedures governing the solicitation process. 17. Bankruptcy Code means title 11 of the United States Code, 11 U.S.C Bankruptcy Court means the United States Bankruptcy Court for the Southern District of New York having jurisdiction over the Chapter 11 Cases. 19. Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure as promulgated by the United States Supreme Court under section 2075 of title 28 of the United States Code, 28 U.S.C. 2075, as applicable to the Chapter 11 Cases, and the general local and chambers rules of the Bankruptcy Court. 20. Business Day means any day, other than a Saturday, Sunday or legal holiday (as that term is defined in Bankruptcy Rule 9006(a)). 21. CapCo means Loehmann s Capital Corp., a special purpose corporation formed for the sole purpose of issuing the Notes. CapCo is a Debtor. 22. CapCo Lease means that certain Lease and License Financing and Purchase Option Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time), dated as of October 13, 2004, between CapCo, as Lessor, and Loehmann s Operating Co., as Lessee. 23. Cash means legal tender of the United States of America. 24. Causes of Action means, without limitation, any and all Claims, causes of action, demands, rights, actions, suits, damages, injuries, remedies, obligations, liabilities, accounts, defenses, offsets, powers, privileges, licenses and franchises of any kind or character whatsoever, known, unknown, accrued or to accrue, contingent or non-contingent, matured or unmatured, suspected or unsuspected, foreseen or unforeseen, whether arising before, on or after the Petition Date, in contract or in tort, in law or in equity, or under any other theory of law, whether asserted or assertable directly or derivatively in law or equity or otherwise by way of claim, counterclaim, cross-claim, third party action, action for indemnity or contribution or otherwise, including, without limitation, all Debtor Causes of Action and all Avoidance Actions. Interest. 25. Certificate means any instrument evidencing a Claim or an 26. Chapter 11 Cases means (a) when used with reference to a particular Debtor, the chapter 11 case Filed for that Debtor under chapter 11 of the Bankruptcy Code in the Bankruptcy Court and (b) when used with reference to all Debtors, the jointly administered chapter 11 cases for all of the Debtors. 4

10 27. Claim means any claim against a Debtor as defined in section 101(5) of the Bankruptcy Code. 28. Claims Bar Date means, as applicable, (a) [ ] at 5:00 p.m. prevailing Eastern Time or (b) such other period of limitation as may be specifically fixed by an order of the Bankruptcy Court for Filing such Claim. 29. Claims Register means the official register of Claims (other than Secured Note Claims) and Interests maintained by the Notice, Claims and Solicitation Agent. 30. Class means a category of holders of Claims or Equity Interests as set forth in Article III hereof pursuant to section 1122(a) of the Bankruptcy Code. 31. Class A Fixed Rate Notes means the 12% series A senior secured class A notes due October 1, 2011 issued pursuant to the Indenture. 32. Class A Floating Rate Notes means the series A senior secured class A floating rate notes due October 1, 2011 issued pursuant to the Indenture. 33. Class A Notes means the Class A Fixed Rate Notes and/or the Class A Floating Rate Notes. 34. Class A Notes Claims means Claims, Liens, rights or interests of holders of Class A Notes arising under, related to, or in connection with, the Class A Notes, the Indenture and/or the Related Agreements. 35. Class A Rights means the right of each Eligible Holder to purchase New Convertible Preferred Stock up to its Pro Rata share of the Class A Notes Claims pursuant to the Rights Offering, provided however, that such rights shall only be exercisable by an Eligible Holder that votes to accept the Plan. 36. Class A Notes Claims Distribution means the distribution to the Holders of Class A Notes Claims consisting of shares of New Common Stock representing (a) in the event Class 4 (Class B Notes Claims) votes to Accept the Plan, 83.2% of the total outstanding New Common Stock on the Effective Date and (b) in the event Class 4 (Class B Notes Claims) does not vote to Accept the Plan, 100% of the total outstanding New Common Stock on the Effective Date, in each case prior to dilution resulting from any conversion of the New Preferred Stock to New Common Stock and any New Common Stock issued pursuant to the Management Incentive Plan. 37. Class B Notes means the 13% series A senior secured class B notes due October 1, 2011 issued pursuant to the Indenture. 38. Class B Notes Claims means any Claims, Liens, rights or interests of holders of Class B Notes arising under, related to, or in connection with, the Class B Notes, the Indenture and/or the Related Agreements. 39. Class B Notes Claims Distribution means, provided that Class 4 (Class B Notes Claims) votes to Accept the Plan, the distribution to the Holders of Class 5

11 B Notes, which shall be funded solely from the distributions otherwise payable, or otherwise directly or indirectly available, under the Plan to Holders of Allowed Class A Notes Claims, consisting of 16.8% of the New Common Stock on the Effective Date prior to dilution resulting from any conversion of the New Preferred Stock to New Common Stock and any New Common Stock issued pursuant to the Management Incentive Plan. For the avoidance of doubt, if Class 4 (Class B Notes Claims) does not vote to Accept the Plan, Class 4 shall receive no distribution under the Plan. 40. Commitment Fee means that certain commitment fee payable to the Backstop Parties pursuant to the terms and conditions of the Commitment Letter and the Commitment Order. 41. Commitment Fee Preferred Stock means 94,382 shares of convertible preferred stock issued by Reorganized Loehmann s Holdings convertible into 1.9% of New Common Stock on a fully diluted basis (excluding any shares to be issued under the Management Incentive Plan), which shall be issued to the Backstop Parties on account of the Commitment Fee without prejudice to Whippoorwill s rights to receive its portion of the Commitment Fee in Cash in accordance with the terms and conditions of the Commitment Letter. The Commitment Fee Preferred Stock shall pay a cumulative Cash dividend at the rate of 2% per annum. The Commitment Fee Preferred Stock shall be subject to the New Shareholders Agreement. 42. Commitment Letter means that certain Amended and Restated Commitment Letter, dated as of November 14, 2010 and amended and restated on December 1, 2010 among the Debtors and the Backstop Parties, as further amended from time to time in accordance with the terms thereof, pursuant to which the Backstop Parties agreed, severally and not jointly, to purchase (or cause one or more of its designated Affiliates to purchase) on the Effective Date, any Unsubscribed Shares, subject to the terms and conditions set forth therein. 43. Committee means the official committee of unsecured creditors of the Debtors appointed by the United States Trustee in the Chapter 11 Cases on November 23, 2010, pursuant to section 1102 of the Bankruptcy Code. 44. Compensation and Benefit Claims means any and all Claims arising on account of, or relating to, the Compensation and Benefits Programs assumed pursuant to Article V.G hereof. 45. Compensation and Benefits Programs means all employment and severance agreements and policies, and all compensation and benefit plans, policies, and programs of the Debtors, and all amendments and modifications thereto, applicable to the Debtors employees, former employees, retirees and non-employee directors and the employees, former employees and retirees of their subsidiaries, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit agreements and plans, incentive plans, deferred compensation plans and life, accidental death and dismemberment insurance plans, including the Employee-Related Programs and the Employment Agreements, in each case solely to the extent that such policies have been identified and described in the Plan Supplement. 6

12 46. Confirmation means the entry of the Confirmation Order by the Bankruptcy Court on the docket of the Chapter 11 Cases. 47. Confirmation Date means the date upon which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases. 48. Confirmation Hearing means the hearing conducted by the Bankruptcy Court pursuant to section 1128(a) of the Bankruptcy Code to consider confirmation of the Plan, as such hearing may be adjourned or continued from time to time. 49. Confirmation Order means the order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code, which shall be in form and substance acceptable to each Backstop Party in its sole discretion and consistent in all respects with the Commitment Letter and the Restructuring Support Agreement. 50. Covenant Compliance and Indemnity Agreement means the covenant compliance and indemnity agreement dated October 13, 2004 (as amended, supplemented or otherwise modified from time to time), among CapCo and each of Loehmann s Holdings, Inc., Loehmann s Inc., Loehmann s Real Estate Holdings Inc., and Loehmann s Operating Co. 51. Cure means the payment of Cash by the applicable Debtors, or the distribution of other property (as the applicable Debtors and the counterparty to the Executory Contract or Unexpired Lease may agree or the Bankruptcy Court may order), as necessary to (a) cure a monetary default by the Debtors in accordance with the terms of an Executory Contract or Unexpired Lease of the Debtors and (b) permit the Debtors to assume such Executory Contract or Unexpired Lease under sections 365 and 1123 of the Bankruptcy Code. 52. Debtor means one of the Debtors, in its individual capacity as a debtor and debtor-in-possession in the Chapter 11 Cases. 53. Debtor Causes of Action means all claims, actions, causes of action, chooses in action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, remedies, rights of set-off, third-party claims, subrogation claims, contribution claims, reimbursement claims, indemnity claims, counterclaims, and crossclaims (including, but not limited to, all claims and any avoidance, recovery, subordination or other actions against insiders and/or any other entities under the Bankruptcy Code, including Avoidance Actions and all such matters set forth in Article IV.D and Article IV.R) of any of the Debtors, the Debtors-in- Possession, and/or the Estates (including, but not limited to, those actions set forth in the Plan Supplement), whether known or unknown, liquidated or unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed, that are or may be pending on the Effective Date or instituted by the Reorganized Debtors after the Effective Date against any entity, based in law or equity, including, but not limited to, under the 7

13 Bankruptcy Code, whether direct, indirect, derivative, or otherwise and whether asserted or unasserted as of the date of entry of the Confirmation Order. 54. Debtor Releasees means (a) each of the Debtors and (b) each of the Debtors respective Related Persons. 55. Debtors means, collectively, Loehmann s Holdings, Inc., Loehmann s, Inc., Loehmann s Real Estate Holdings, Inc., Loehmann s Operating Co. and Loehmann s Capital Corp. 56. Debtors-in-Possession means, collectively, the Debtors as debtors in possession in the Chapter 11 Cases. 57. DIP Agent means Crystal Financial LLC in its capacity as administrative agent under the DIP Facility. 58. DIP Facility means that certain Debtor in Possession Credit Agreement among Loehmann s Operating Co. as borrower, the Guarantors (as defined in the DIP Facility), any other persons designated therein as Credit Parties (as defined in the DIP Facility), the DIP Agent and the DIP Lenders, as may be amended, modified, ratified, extended, renewed, restated or replaced. 59. DIP Facility Claims means any secured Claim held by the DIP Lenders and/or the DIP Agent arising under or related to the DIP Facility and the other Loan Documents (as defined therein). 60. DIP Lenders means, collectively, the Lenders (as defined in the DIP Facility) party to the DIP Facility from time to time. 61. DIP Order means the order entered by the Bankruptcy Court on [December 6, 2010] authorizing and approving the DIP Facility. 62. Disclosure Statement means the disclosure statement for the Plan, including, without limitation, all exhibits and schedules thereto, as amended, supplemented or modified from time to time, that is prepared and distributed in accordance with sections 1125 of the Bankruptcy Code and Bankruptcy Rule Disputed Claim means a Claim, or any portion thereof, that (i) has not been Scheduled by the Debtors or has been Scheduled at zero, or has been Scheduled as contingent, unliquidated, disputed or undetermined and for which no proof of claim has been timely Filed with the Bankruptcy Court, (ii) is in excess of the amount Scheduled as other than disputed, contingent or unliquidated, (iii) is the subject of an objection or request for estimation Filed in the Bankruptcy Court and which objection or request for estimation has not been withdrawn or overruled by a Final Order of the Bankruptcy Court, (iv) is a Subordinated Claim and/or (v) is otherwise disputed by the Debtors in accordance with applicable law, which dispute has not been withdrawn, resolved or overruled by Final Order. 64. Distribution Agent means (i) the Entity or Entities chosen by the Reorganized Debtors to make or to facilitate distributions pursuant to the Plan, 8

14 including the Reorganized Debtors or any Third Party Distribution Agent or (ii) the Indenture Trustee, to the extent it makes distributions to Holders of Secured Note Claims pursuant to the Plan. 65. DTC means Depository Trust Company. 66. Effective Date means the date selected by the Debtors that is at least one (1) Business Day after the entry of the Confirmation Order on which: (a) no stay of the Confirmation Order is in effect; and (b) all conditions specified in Article VIII.B have been (i) satisfied or (ii) waived pursuant to Article VIII.C; provided, that the Effective Date shall be no later than February 18, 2011 unless otherwise agreed by each of the Backstop Parties. 67. Eligible Holder means any Holder of a Class A Notes Claims who (i) duly certifies in accordance with the terms set forth in the subscription form accompanying the Rights Offering Procedures and the Rights Offering Procedures that such Holder is a Qualified Institutional Buyer. 68. Employee-Related Programs means those certain employee-related programs listed in the Plan Supplement. 69. Entity means an entity as defined in section 101(15) of the Bankruptcy Code. 70. Equity Interest means any issued, unissued, authorized or outstanding shares of common stock, preferred stock or other instrument evidencing an ownership interest in a Debtor, whether or not transferable, together with any options, warrants, equity-based awards or contractual rights to purchase or acquire such equity interests at any time and all rights arising with respect thereto that existed immediately before the Effective Date; provided, however, that Equity Interest does not include any Intercompany Interest. 71. Estate means, as to each Debtor, the estate created for such Debtor in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code. 72. Exchange Offer means that certain exchange offer with respect to the Senior Secured Notes that was launched pursuant to the terms of an offering memorandum issued by CapCo on September 27, 2010, which offering memorandum was supplemented on October 14, 2010, October 25, 2010, and October 28, Executory Contract means a contract or lease to which one or more of the Debtors is a party with a counterparty other than another Debtor that is subject to assumption or rejection under sections 365 or 1123 of the Bankruptcy Code. For the avoidance of doubt, the CapCo Lease shall not be considered an Executory Contract pursuant to the Plan 74. Exit Facility means the Exit Financing Agreement, which shall be satisfactory to the Debtors and each of the Backstop Parties in its sole discretion, to be executed as of the Effective Date, including any agreements, amendments, supplements or documents related thereto. 9

15 75. Exit Facility Agent means the administrative agent, or any other financial institution designated as agent, under the Exit Financing Agreement. 76. Exit Facility Lenders means, collectively, the lenders party to the Exit Financing Agreement from time to time. 77. Exit Financing Agreement means an agreement on account of a $40 million senior secured credit facility to be entered into by the Reorganized Debtors on terms satisfactory to the Debtors and each of the Backstop Parties in its sole discretion. 78. File, Filed or Filing means file, filed or filing with the Bankruptcy Court or its authorized designee in the Chapter 11 Cases. 79. Final Order means an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction with respect to the subject matter, which has not been reversed, stayed, modified or amended, and as to which the time to appeal, petition for certiorari or move for reargument or rehearing has expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be Filed has been resolved by the highest court to which the order or judgment was appealed or from which certiorari was sought or has been dismissed with prejudice; provided, however, that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be Filed with respect to such order shall not preclude such order from being a Final Order. 80. GAAP means generally accepted accounting principles in the United States as in effect from time to time. 81. General Unsecured Claims means any Claim against any of the Debtors that is not Administrative Claim, Priority Tax Claim, DIP Financing Claim, Other Priority Claim, Other Secured Claim, Secured Note Claim, Secured Tax Claim, Subordinated Claim or Intercompany Claim. For the avoidance of doubt, Rejection Damage Claims are General Unsecured Claims. 82. General Unsecured Claims Distribution means, provided that, Class 5 (General Unsecured Claims) votes to accept the Plan, the distribution to Holders of Allowed General Unsecured Claims consisting of Cash in the amount of $1.1 million, which shall be funded solely from the distributions otherwise payable, or otherwise directly or indirectly available, under the Plan to Holders of Allowed Class A Notes Claims. For the avoidance of doubt, if Class 5 (General Unsecured Claims) does not vote to Accept the Plan, Class 5 shall receive no distribution under the Plan. 83. General Unsecured Claims Distribution Account means the account established pursuant to Article IV.G of the Plan in the amount of $1.1 million, disbursements from which shall be payable to Holders of Allowed General Unsecured Claims in Class 5 in accordance with Article III.B.5 and VII of the Plan. 84. Holder means an Entity holding a Claim or Interest. 85. Holdings means Loehmann s Real Estate Holdings, Inc. 10

16 86. Impaired means, with respect to a Claim, Equity Interest, or Class of Claims or Equity Interests, impaired within the meaning of section 1124 of the Bankruptcy Code. Article IX.G. 87. Indemnification means the indemnification provision set forth in 88. Indemnification Obligation means a Debtor s obligation under an Executory Contract, assumed in the Chapter 11 Cases, or otherwise to indemnify directors, officers, employees or agents of such Debtor who served in such capacity at any time, with respect to or based upon any act or omission taken or omitted in any of such capacities, or for or on behalf of any Debtor, pursuant to and to the maximum extent provided by the Debtor s respective certificates of in corporation, certificates of formation, bylaws, similar corporate documents, and applicable law, as in effect as of the Effective Date. 89. Indenture means that certain Indenture governing the Notes dated as of October 12, 2004, between the CapCo, as issuer, and the Indenture Trustee, as trustee, as amended, supplemented or otherwise modified from time to time through the Petition Date. 90. Indenture Trustee means Wells Fargo Bank, National Association, or its successor. 91. Indenture Trustee s Fees means the reasonable and documented fees, disbursements, advances and expenses (including professional fees and expenses) of the Indenture Trustee under the Indenture. 92. Intercompany Claims means, collectively, any Claim held by a Debtor against another Debtor or any Claim held by an Affiliate of a Debtor against a Debtor. 93. Intercompany Interest means an Equity Interest in a Debtor held by another Debtor or an Equity Interest in a Debtor held by an Affiliate of a Debtor. For the avoidance of doubt, an Intercompany Interest excludes any Equity Interest in Loehmann s Holdings, Inc. Interests. 94. Interests means, collectively, Equity Interests and Intercompany 95. Interim Compensation Order means an order of the Bankruptcy Court allowing Retained Professionals to seek interim compensation in accordance with the procedures approved therein, as the same may be modified by a Bankruptcy Court order approving the retention of a specific Retained Professional or otherwise. 96. Istithmar means Istithmar Retail Investments. 97. Lease Guarantee means that certain Lease Guarantee (as the same may be amended, restated, supplemented or otherwise modified from time to time), dated as of October 13, 2004, by each of: (i) Loehmann s Holdings, Inc., (ii) Loehmann s, 11

17 Inc., (iii) Loehmann s Real Estate Holdings, Inc., (iv) Loehmann s Operating Co., (v) and any other subsidiary of Loehmann s Holdings, Inc., in favor of CapCo. 98. Lease Security Agreement shall mean the Lease Security Agreement, dated as of October 13, 2004 (as amended, supplemented or otherwise modified from time to time), among CapCo, Loehmann s Holdings, Inc., Loehmann s Inc., Loehmann s Real Estate Holdings, Inc., and Loehmann s Operating Co. Code. 99. Lien means a lien as defined in section 101(37) of the Bankruptcy 100. Local Bankruptcy Rules means the Local Bankruptcy Rules for the Southern District of New York Management Incentive Plan means any post-effective Date management equity incentive plan to be approved by the New Board Moody s means Moody s Investors Service, Inc New Board means the board of directors of Reorganized Loehmann s Holdings, Inc New Common Stock means newly-issued shares of common stock of Reorganized Loehmann s Holdings, Inc. The New Common Stock shall be subject to the New Shareholders Agreement New Convertible Preferred Stock means 2,359,560 shares of convertible preferred equity issued by Reorganized Loehmann s Holdings, Inc. and convertible into 47.2% of New Common Stock (excluding any shares to be issued under the Management Incentive Plan), which shall be issued to the New Money Investors and/or the Backstop Parties, as applicable, pursuant to the Rights Offering for an aggregate purchase price equal to $25 million. The New Convertible Preferred Stock shall: (i) pay cumulative Cash dividends at the rate of 2% per annum; and (ii) be subject to the New Shareholders Agreement New Money Investor means each Eligible Holder that votes to accept the Plan duly and timely exercises its Subscription Rights in connection with the Rights Offering New Preferred Stock shall mean the Commitment Fee Preferred Stock, together with the New Convertible Preferred Stock New Shareholders Agreement means a shareholder agreement with respect to Reorganized Loehmann s Holdings, which shall be in form and substance satisfactory to each of the Backstop Parties in its sole discretion Non-Released Parties means those Entities that are not Debtor Releasees or Third Party Releasees Notes means the Class A Notes and/or the Class B Notes. 12

18 111. Notes Trademark Security Agreement means the Notes Trademark Security Agreement, dated as of October 12, 2004, (as amended, supplemented or otherwise modified from time to time), between CapCo and the Indenture Trustee Notice, Claims and Solicitation Agent means, Kurtzman Carson Consultants LLC located at 2335 Alaska Avenue, El Segundo, California 90245, retained as the Debtors notice, claims and solicitation agent Other Priority Claim means any Claim accorded priority in right of payment under section 507(a) of the Bankruptcy Code, other than a Priority Tax Claim Other Secured Claim means any Secured Claim other than a Secured Note Claim or a Secured Tax Claim against any of the Debtors, including, without limitation, Prepetition Credit Agreement Secured Claims to the extent not satisfied with the proceeds of the DIP Facility. For the avoidance of doubt, Other Secured Claims shall not include DIP Facility Claims Person means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization, government or agency or political subdivision thereof or any other Entity Petition Date means November 15, Plan means this joint plan of reorganization under chapter 11 of the Bankruptcy Code, either in its present form or as it may be altered, amended, modified or supplemented from time to time in accordance with the Bankruptcy Code, the Bankruptcy Rules or the terms hereof, as the case may be, and the Plan Supplement, which is incorporated herein by reference, including, without limitation, all exhibits and schedules hereto and thereto Plan Supplement means the compilation of documents and forms of documents, schedules and exhibits to be Filed on the Plan Supplement Filing Date, as amended, modified or supplemented from time to time in accordance with the terms hereof and in accordance with the Bankruptcy Code and the Bankruptcy Rules, comprising, without limitation, the following documents: (a) the form of the Exit Financing Agreement; (b) the list of the Employee-Related Programs; (c) the Rejected Executory Contract and Unexpired Lease Schedule; (d) the Assumed Executory Contract and Unexpired Lease Schedule; (e) a schedule of Compensation and Benefits Programs to be rejected, if any; (f) the Amended and Restated Certificate of Incorporation; (g) the Amended and Restated Bylaws; (h) a schedule of the Debtor Causes of Action to be retained by the Reorganized Debtors; (i) the identity of the Reorganized Debtors officers; (j) the identity of the members of the New Board; (k) a certificate of designation for the New Convertible Preferred Stock; and (l) the New Shareholders Agreement; provided, that, all of the schedules, lists, agreements and documents included in the Plan Supplement shall be in form and substance satisfactory to each of the Backstop Parties in its sole discretion. 13

19 119. Plan Supplement Filing Date means the date that is five (5) Business Days prior to the Voting Deadline Prepetition Administrative Agent means Crystal Financial LLC in its capacity as administrative agent and collateral agent under the Prepetition Credit Agreement Prepetition Credit Agreement means that certain Credit Agreement, dated as of September 15, 2010, by and among Loehmann s Operating Co., as borrower, Loehmann s Holdings, Inc., Loehmann s Inc., and Loehmann s Real Estate Holdings, Inc., each as a guarantor, any other persons parties thereto designated from time to time as Credit Parties (as defined in the Credit Agreement), and Crystal Financial LLC, as a lender and as agent for all lenders, and any other lenders party thereto from time to time Prepetition Credit Agreement Lenders means the lenders under the Prepetition Credit Agreement, as of the Petition Date Prepetition Credit Agreement Secured Claims means secured Claims arising out of the Prepetition Credit Agreement, in an aggregate Allowed amount equal to $31,424, plus accrued and unpaid interest as of the Petition Date Priority Tax Claim means a Claim of a governmental unit of the kind specified in section 507(a)(8) of the Bankruptcy Code Professional Compensation and Reimbursement Claim means a Claim by a Retained Professional seeking an award by the Bankruptcy Court of compensation for services rendered or reimbursement of expenses incurred through and including the Effective Date under sections 330, 331, 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy Code Proof of Claim means a proof of Claim Filed against any Debtor in the Chapter 11 Cases Pro Rata means the proportion that an Allowed Claim in a particular Class bears to the aggregate amount of Allowed Claims in that Class, or the proportion of a particular recovery that a Class is entitled to share with other Classes entitled to the same recovery under the Plan, as applicable Qualified Institutional Buyer shall mean a qualified institutional buyer, as such term is defined pursuant to Rule 144A promulgated pursuant to the Securities Act Registration Rights Agreement means Registration Rights Agreement, dated as of October 12, 2004, (as amended, supplemented or otherwise modified from time to time), between CapCo and Jefferies & Company, Inc Rejection Damage Claims means any Claim arising from, or relating to, the rejection of an Executory Contract or Unexpired Lease pursuant to 14

20 section 365(a) of the Bankruptcy Code by any of the Debtors, as limited, in the case of a rejected Unexpired Lease, by section 502(b)(6) of the Bankruptcy Code Rejected Executory Contract and Unexpired Lease Schedule means the list of Executory Contracts and Unexpired Leases to be rejected by the Debtors pursuant to the provisions of Article V hereof Related Agreements mean any of the CapCo Lease, the Lease Guarantee, the Security Agreement, the Security and Control Agreement, the Lease Security Agreement, the Notes Trademark Security Agreement, the Registration Rights Agreement, the Registration Rights Assistance Agreement, the Covenant Compliance and Indemnity Agreement, and any other Lease Documents (as such term is defined in the CapCo Lease.) 133. Related Persons means, with respect to any person, such person s predecessors, successors, assigns and present and former affiliates (whether by operation of law or otherwise) and each of their respective members, partners, equity holders, officers, directors, employees, representatives, advisors, attorneys, auditors, agents and professionals, in each case acting in such capacity on or any time after the Petition Date, and any person claiming by or through any of them. Releasees Released Parties means the Debtor Releasees and the Third Party 135. Reorganized Debtors means the Debtors, as reorganized pursuant to and under the Plan, or any successor thereto, by merger, consolidation, or otherwise, on or after the Effective Date Reorganized Loehmann s Holdings, Inc. means Loehmann s Holdings, Inc., as reorganized pursuant to and under the Plan, or any successor thereto, by merger, consolidation, or otherwise, on or after the Effective Date Representatives means, with regard to an Entity, current and former officers, directors, members (including ex officio members), managers, employees, partners, advisors, attorneys, professionals, accountants, investment bankers, investment advisors, actuaries, Affiliates, financial advisors, consultants, agents and other representatives of each of the foregoing Entities (whether current or former, in each case in his, her or its capacity as such) Restructuring Support Agreement means that certain Amended and Restated Restructuring Support Agreement dated as of November 14, 2010 and amended and restated on December 1, 2010 among the Debtors, CapCo, Istithmar and the Supporting Secured Noteholders, as amended from time to time in accordance with the terms thereof. of the Plan Restructuring Transactions has the meaning set forth in Article IV.I 140. Retained Professional means an Entity: (a) employed in the Chapter 11 Cases pursuant to a Final Order in accordance with sections 327 and 1103 of 15

21 the Bankruptcy Code and to be compensated for services rendered prior to the Effective Date, pursuant to sections 327, 328, 329, 330 and 331 of the Bankruptcy Code; or (b) for which compensation and reimbursement has been allowed by the Bankruptcy Court pursuant to section 503(b)(4) of the Bankruptcy Code Rights Offering means the offering of the Subscription Rights by the Debtors to Eligible Holders of Class A Notes in accordance with the Rights Offering Procedures and the Plan. million Rights Offering Amount means the aggregate purchase price of $ Rights Offering Procedures means those certain Rights Offering Procedures, setting forth the terms and conditions of the Rights Offering, in substantially the form attached as Exhibit H to the Disclosure Statement S&P means Standard & Poor s Ratings Services Scheduled means with respect to any Claim, the status and amount, if any, of such Claim as set forth in the Schedules Schedules means, collectively, the schedules of assets and liabilities, schedules of Executory Contracts and Unexpired Leases and statements of financial affairs Filed by the Debtors pursuant to section 521 of the Bankruptcy Code and in substantial conformance with the official bankruptcy forms, as the same may have been amended, modified or supplemented from time to time Secured Claim means any Claim against any Debtor that is secured by a Lien on property in which a Debtor s Estate has an interest or that is subject to setoff under section 553 of the Bankruptcy Code, to the extent of the value of the Claim Holder s interest in the applicable Estate s interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to section 506(a) of the Bankruptcy Code or, in the case of setoff, pursuant to section 553 of the Bankruptcy Code Secured Note Claims means Class A Notes Claims and Class B Notes Claims, individually and in the aggregate Secured Tax Claim means any Secured Claim which, absent its secured status, would be entitled to payment as a Priority Tax Claim Securities means any instruments that qualify under section 2(a)(1) of the Securities Act, including the Notes and the New Secured Notes; provided, that, for the avoidance of doubt, the Notes shall be canceled pursuant to Article IV.F Securities Act means the Securities Act of 1933, 15 U.S. C. 77a- 77aa, as now in effect or hereafter amended, or any similar federal, state or local law. 16